As of today (December 2017), the housing supply and demand in many regions across the United States is off balance. There are far more buyers than sellers! This makes for a favorable environment for those selling their home, but home buyers are facing an uphill battle.

What is a sellers market?

The market favors a seller when they don't have much competition. Right now we are seeing low housing inventory across the country while buyers are out in large numbers.

Check out the previous post, 'Why is the Housing Inventory low' to better understand why the inventory has decreased.

With so many buyers and so little houses for sale, buyers are forced to compete with each other. We are seeing properties that are priced correctly, in decent condition, and in a desirable locations, sell in just a few days. Not only are they selling fast, but they are selling close to (sometimes over) asking price. 

It's a fantastic situation for sellers, but is a true battle ground for buyers!

How can buyers compete?

Trying to buy in a sellers market can be very frustrating!  Here are some tips that every buyer should know before beginning their search.

1. Strengthen your finances - The very first step when preparing to buy a home is to build up your savings and reduce your debt. The stronger you are financially, the more appealing you are to a seller. Buyers with a stronger financial position tend to win out in a multiple offer situation. Sellers prefer to accept an offer that presents the smoothest process for them. Good financial status will make your offer much more appealing. Stay tuned for the next post with ideas to help boost your savings!

2. Research the local market - This is something your agent will be able to help you with. Once you have narrowed down your search to a few neighborhoods, ask your agent to provide you with a market analysis of the area(s). This will help prepare your expectations in regard to the local inventory and the average number of days properties in that area are sitting on the market.

3. Mortgage Pre-Approval - You will need to submit your mortgage pre approval letter when you present your offer to purchase a property. Make sure you have this letter from your lender in hand before you begin to look at any properties. If you wait to reach out to a broker until after you find a house, there is the risk that the property will sell to another buyer before you have the opportunity to apply for and receive all of your documents.

The pre-approval letter shows a seller that you are qualified to purchase the home. It is highly unlikely for them to accept an offer and take their property off the market without proof of your financial ability to close on the deal!

4. Make a list - Create a list of the items you absolutely must-have in a home as well as a list of the items that you 'prefer' in a home. Be prepared to compromise on this list! It is highly unlikely for anyone to find a property that checks off every single item on their list (especially in a sellers market). Keep an open mind when touring houses and do your best not to get caught up on details that are easily changed/repaired.

5. Be available - This is so important! Your agent should set you up with property alerts through their mls (multiple listing server). This will alert you when new homes that meet your search criteria hit the market. As soon as a home pops up that catches your eye, ask your agent to schedule a showing at the earliest convenience to all. In a sellers market, some properties go under contract within the first few days of listing. If you want to compete, you need to be one of the first buyers through the door.

6. Be ready to make an offer - When the market is more balanced, a buyer may have the luxury to tour a property more than once and 'sleep on it' for a few days before deciding to make an offer. In a sellers market, by the time you wake up, the house could be unavailable. So when touring houses, be mentally prepared to put an offer in the same day you see something that meets most of your check list.

Try your best to emotionally detach yourself from a home you are interested in until after you get past the inspection negotiations. Too many people begin to mentally decorate a house before the deal is done. This sets them up for possible disappointment if negotiations don't go well. Keep your business hat on. Think logically. Don't be afraid to walk away (when within your rights) if the situation is not working out in your best interest. 

I say it all the time, but your best tools are the experts you surround yourself with. Having a good agent in your corner will help you to conquer many challenges and you will be living in your prized possession soon enough!